Now, at long last, corporations will enjoy a level playing field with you and I when it comes to spending billions of dollars to express ourselves freely on the subject of who should be our judges and legislators and presidents.

However, this new revolution cannot end right here. If our corporate citizens enjoy first amendment rights, any bozo can see that they should enjoy, for example, second amendment rights, as well. After all, in the course of corporate events, it may become necessary at any time for any corporation to bear arms against a sea of troubles and, by opposing, end them.

We are, of course, not just talking just about the ability to hire armies of armed security guards, or handing over corporate security to Blackwater. Private citizens can apply for gun licenses, they can stockpile arms and ammunition in order to protect their lives and property. Why, pray, should corporate citizens be deprived the same basic right? Why shouldn’t Exxon-Mobil be able to obtain a gun license? Why shouldn’t Goldman-Sachs have a corporate armory? Are corporate lives worthless? If you cut them, do they not bleed red ink? If they suffer fatal injuries to their profits, do they not die? (If a 911 call to Paulson-Bernanke-Geithner results in a miraculous complete recovery which doesn’t even leave any visible scars, that’s just the exception which proves the rule.)

Then, there’s the infamy of our corporate citizens suffering taxation without representation. We all know how reprehensible that is (unless we’re talking of the citizens of Washington, D.C., when it is proper and fitting that they be denied the representation the rest of the country enjoys, because to grant them one lousy Representative in the House would upset the delicate balance between Democrats and Republicans in the House, by creating one more safe Democratic seat).

Surely, no one is going to be so willing to wear their prejudices on their sleeve as to argue that a corporate citizen that pays millions of times the tax that the average human citizen pays should get just one lousy vote? We have to recognize that any sensible interpretation of the principle of equal representation requires that those who suffer greater taxation be afforded greater representation.

So, yes, what the Supreme Court did yesterday deserves to be be celebrated far and wide. But it is only the first real step in a long and painful journey. The U.S. Chamber of Commerce has a dream. And they will never flag in their tireless struggle for the basic rights that the rest of us take for granted until victory is theirs, and they achieve complete equality for corporate citizens of the United States.

The White House chief of staff, Rahm Emanuel, has decided not to speak to the board of JPMorgan Chase when it meets here on Monday, he said Sunday after considering the invitation for several days.

Mr. Emanuel is a longtime acquaintance of the bank’s chairman and chief executive, Jamie Dimon, who previously headed BankOne in Chicago, where he met some influential Democrats, including Mr. Emanuel and President Obama.

Because of his relationship with Mr. Dimon, Mr. Emanuel agreed to consider JPMorgan’s invitation after the Treasury secretary, Timothy F. Geithner, declined out of concern that he would appear too cozy with a company that has numerous business and regulatory dealings with his department.

Mr. Emanuel first sought advice from the White House counsel’s office about the propriety of meeting with the bank’s board. Mr. Emanuel said Sunday evening that the White House counsel held him to the same standard as Mr. Geithner when it came to avoiding what might be seen as a conflict of interest.

Obama administration ethics rules:

Staffing the administration with their best buddies, and then shoveling billions of dollars via multiple above- and below-the-radar conduits and going easy on regulation: not a conflict.

Merely speaking at a single board meeting: TOXIC CONFLICT OF INTEREST!

Let it never be said that Geithner is not a true disciple of Hank Paulson.

Paulson screwed us on the way in, when we bought all those lovely securities in troubled banks for way more than they were worth then:

The Treasury secretary has made 174 purchases of banks’ preferred shares that include certificates to buy stock at a later date. He invested $10 billion in Goldman Sachs in October, twice as much as Buffett did the month before, yet gained warrants worth one-fourth as much as the billionaire, according to data compiled by Bloomberg. The Goldman Sachs terms were repeated in most of the other bank bailouts.
[...]
The Treasury, when it was headed by Secretary Henry Paulson, received bank assets worth about $176 billion in exchange for capital purchases of $254 billion under the Troubled Asset Relief Program, the Congressional Oversight Panel said in a report today.

Geithner’s screwing us on the way out, as we rush to sell the warrants back for way less than they are worth now:

The U.S. Treasury has sold warrants it obtained from rescued banks for about two-thirds of what they are worth, a group overseeing the federal bailout said.

The Congressional Oversight Panel, in a report released today, said taxpayers should have recovered $10 million more from warrant sales with 11 small banks. A Treasury official countered that the Obama administration is seeking to protect taxpayers.

(2) The Original Screwing

Bloomberg:

The five-member (Congressional Oversight Panel’s) report said that the Treasury’s portfolio of warrants could be worth as much as $12.3 billion, with a “best estimate” of $8.1 billion and a “low estimate” of $4.7 billion.

At one level, the news is that we stand to lose between $1.6 billion and $4.1 billion as the Obama administration continues to seek to protect taxpayers by selling warrants for two-thirds of what they are worth.

At another level, the news is that we really know very little about how to value such derivatives (which are just about the simplest kind of derivatives that exist). We do have lovely formulae; the Congressional Oversight Panel used the rightly famous (and Nobel-Prize-winning) Black-Scholes options pricing model for their estimates. But nobody really knows with any confidence what numbers should be plugged into the formulae. So the best we can do is say that the warrants are worth anywhere between $4.7 billion and $12.3 billion. That’s how well we know how to value the very simplest derivatives.

And what were these banks and bankers who beat our economy into a bloody pulp doing? They were taking derivatives that are infinitely more complicated, and they were putting billions and trillions of dollars at risk by buying or selling these derivatives.

Roll that around in your mind, and allow yourself to contemplate the awesome risks these banks and bankers blithely took.

After all those losses and bailouts, rank-and-file employees of Citigroup are getting some good news: their salaries are going up.

The troubled banking giant, which to many symbolizes the troubles in the nation’s financial industry, intends to raise workers’ base salaries by as much as 50 percent this year to offset smaller annual bonuses, according to people with direct knowledge of the plan.

The shift means that most Citigroup employees will make as much money as they did in 2008, although some might earn more and others less.

But that’s not all, by any means. How about this doozy?

The company also plans to award millions of new stock options to employees in an effort to retain workers and neutralize a precipitous drop in the value of their stock holdings.

The whole point of giving stock options to employees and executives, Dr. Pandit, is supposed to be to make them care about not taking actions which cause “a precipitous drop in the value of their stock holdings”. If you just go ahead and give them more options to neutralize precipitous drops, that kind of neutralizes the whole incentive to care about destroying share value, doesn’t it?

Of course, it’s not just Citigroup but the whole damn industry that has an extremely bizarre attitude to compensation. Here’s how the industry is tightening its belt in response to the economic carnage that has still not finished working its way through the economy (the economic carnage that the industry itself unleashed):

Outsize pay on Wall Street, particularly the industry’s bonus culture, is widely seen as having encouraged the risk-taking that led to the gravest financial crisis since the Depression. But industrywide, total compensation is expected to rise 20 to 30 percent this year, approximately to the levels of 2005, before the crisis, according to Johnson Associates, a compensation consulting firm. Total industry pay would still be below the record levels of 2007, but only a bit.

That is, of course, only the logical outcome of the investment-banks-and-bankers-must-be-protected-at-all-costs approach to the economic meltdown that we have seen from the seamless triumvirate of Hank Paulson and Larry Summers and Timothy Geithner. It tends to breed a certain sense of righteous entitlement. And invulnerability.

You can say one thing for John Ashcroft: he’s not short on chutzpah.

In an op-ed in today’s New York Times, the former attorney general points out a thorny problem that the Justice Department may face as a result of the financial crisis: if there’s evidence that a company that has received significant amounts of bailout money committed fraud or other financial crimes, how do the Feds prosecute that company, while still protecting the health of the company on behalf of taxpayers?

The answer, according to Ashcroft: deferred prosecution agreements.

These deals, the former AG writes, offer “more appropriate methods of providing justice in the best interests of the public as well as a company’s employees and shareholders. They avoid the destructiveness of indictments and allow companies to remain in business while operating under the increased scrutiny of federally appointed monitors.”
[...]
… To argue for the idea, Ashcroft cites the example of a deferred prosecution agreement that DOJ reached in 2007 with nation’s five largest manufacturers of prosthetic hips and knees, accused of giving kickbacks to orthopedic surgeons who used their products. In the spirit of disclosure, he notes in parentheses: “I was a paid monitor for one of these companies, Zimmer Holdings.”

But those pithy parentheses don’t begin to make clear that making such deals more prevalent, as Ashcroft desires, would represent a potential financial boon for the ex-AG, who now runs the Ashcroft Group, a law and lobbying firm — assuming he intends to remain active in the deferred prosecution agreement business.

Ashcroft also doesn’t mention that he’s drawn intense criticism for the Zimmer gig. That’s because the man who awarded it to him — then US Attorney Chris Christie, (sic) was a subordinate of Ashcroft’s at DOJ. Ashcroft was reportedly given the job — said to be worth between $28 and 52 million to the Ashcroft Group, at Zimmer’s expense — with no public notice and no outside bidding.

After initially refusing to answer questions bout the deal last year, Ashcroft eventually testified before Congress about it. During that hearing in March 2008, Rep. Linda Sanchez (D-CA) declared that the contract appeared to be “a backroom, sweetheart deal.”

The Washington Post last year added some additional details about the payments:
Ashcroft and about a half-dozen senior staff members of his firm are covered under a flat $750,000 monthly payment from Zimmer. Other top lawyers affiliated with Ashcroft’s consulting business are billing as much as $895 per hour under the agreement, while administrative support staff members are billing $50 to $150 per hour, Senate aides said.

Bills submitted by monitors for the other four companies involved in the settlement are less than half of what the Ashcroft group has charged, averaging a total of about $2 million each, the aides said.
[...]
After having been slammed for the Christie deal, you’d hope that Ashcroft would think twice about publicly touting the benefits of such arrangements — especially without clearly disclosing that he could well benefit financially from their more widespread adoption. Guess not.

You’d also think the New York Times would want to give readers a bit more information about its writer’s financial stake in the issue he’s writing about. But then, we already know that the paper’s op-ed page doesn’t see disclosure as that big of a deal (sic), so maybe it’s not surprising.

Ashcroft managed to briefly attain sainthood as a result of the Fable of the Hospital Bed, but the feet of clay have always been gigantic in comparison to the brief, tenuous halo. And this op-ed incident, and its backstory, show Ashcroft at his sleazy, uncaring best.

Then there’s also the curiously uncaring attitude of New York Fed chairman Stephen Friedman to appearances of conflict of interest and impropriety:

The Federal Reserve Bank of New York shaped Washington’s response to the financial crisis late last year, which buoyed Goldman Sachs Group Inc. and other Wall Street firms. Goldman received speedy approval to become a bank holding company in September and a $10 billion capital injection soon after.

During that time, the New York Fed’s chairman, Stephen Friedman, sat on Goldman’s board and had a large holding in Goldman stock, which because of Goldman’s new status as a bank holding company was a violation of Federal Reserve policy.

The New York Fed asked for a waiver, which, after about 2 1/2 months, the Fed granted. While it was weighing the request, Mr. Friedman bought 37,300 more Goldman shares in December. They’ve since risen $1.7 million in value. (…)

Mr. Friedman, who once ran Goldman, says none of these events involved any conflicts. He says his job as chairman of the New York Fed isn’t a policy-making one, that he didn’t consider his purchases of more Goldman shares to conflict with Fed policy, and bought shares because they were very cheap.

He knew the fact that he owned shares in Goldman “was a violation of Federal Reserve policy” (because he had to apply for a waiver). If owning shares of Goldman was a violation, buying more shares of Goldman had to be a violation too. But it didn’t matter that it was, actually, a violation. All that mattered was that he decided he didn’t consider it to be a violation. That made it okay for him to buy more shares in December.

Could there be a more egregious example of “ha ha, the rules don’t apply to me!” arrogance? Of completely imperious indifference to situational optics? Friedman is clearly a man who is secure in the belief that in the time of Geithner and Summers, the Obama administration will never hold him accountable for such peccadilloes. (Long live transparency! Long live accountability! Long live the high ethical standards of the Obama administration!)

And it never once occurred to Friedman that the very fact that he was required to ask for a waiver meant there were real conflict of interest issues here? Since Friedman is determined to be disingenuous, someone needs to spell out the “large and obvious” conflict of interest in terms that a fourth grader would understand. Someone did:

Whatever Mr. Friedman might think, having a director of the New York Fed serving on the board of Goldman Sachs, and owning 98,600 shares of Goldman Sachs, became an obvious conflict of interest once Goldman became a bank holding company. The New York Fed regulates banks and bank holding companies headquartered in New York, New Jersey, and Fairfield County, Connecticut, and enforces laws governing them, in addition to doing various other things that can affect their share prices. Goldman Sachs is a bank holding company headquartered in New York. I’m not sure how a conflict of interest could be more obvious than that.

Moving from facts to speculation, why would someone in Friedman’s position make that questionable purchase of additional shares? Because “they were very cheap” hardly cuts it. There were presumably lots of other shares that looked very cheap to Friedman at the time, which would not have put him in conflict-of-interest and violation-of-Fed-policy hot water. Friedman once ran Goldman; presumably he still has an information pipeline into the firm. If he were acting on inside information, if he had reason to view that $1.7 million profit as a sure thing, that would explain a lot, wouldn’t it?

*** Update, 7:49 a.m. ***

While the New York Fed had no problems granting Friedman a waiver to hold shares of a bank holding company he’s responsible for regulating, other regional Feds don’t see that as kosher at all:

The 12 regional Federal Reserve banks have conflicting practices regarding directors who are board members of banks and own shares of bank-holding companies, heightening calls to overhaul the policies at these financial institutions.
[...]
This week, some other regional Fed banks, including Kansas City and Dallas, said they wouldn’t have allowed such a situation. And some banking executives criticized the actions of the New York Fed, which declined to comment on Tuesday but previously said it couldn’t afford to lose Mr. Friedman at such a critical time.

Ah, yes, the old “uniquely qualified” defense. Trotted out for Friedman presumably because it has been so strongly validated in Geithner’s case.

“It is the standing procedure of the Dallas Fed that Class C directors avoid any conflicts of interest, real or perceived,” said James Hoard, a spokesman for the Dallas regional bank, in a statement.

Kind of funny, isn’t it? At the Dallas Fed, they avoid any conflicts of interest, real or perceived. At the New York Fed, you can shrug off any real conflict of interest by declaring that you don’t perceive it as a conflict.

So why does Friedman get away with it, why is he so invulnerable to sanctions of any kind? The fact that he was chairman of the board of The Federal Reserve Bank of New York when Geithner was President certainly couldn’t have anything to do with it.

*** Update #2, 8:07 a.m. ***

In fact, other regional Feds consider it a violation of Fed policy to hold shares of a bank holding company even when you’re not responsible for regulating it.

Take John Marvin, Deputy Chairman of the Minneapolis Fed:

Mr. Marvin, the chairman and CEO of Marvin Windows & Doors in Warroad, Minn., found himself in violation of Fed policy in September when Goldman and Morgan Stanley were converted from securities firms into bank-holding companies.

Mr. Marvin and his family members held shares in both companies, said a Minneapolis Fed spokeswoman, stakes valued at well under $100,000. On Nov. 4, 2008, Minneapolis Fed officials asked the Federal Reserve Board in Washington for a waiver of the policy barring Class C directors from having such holdings, and the waiver was granted verbally on Jan. 26.

So, on the one hand there’s John Marvin, who finds himself with family holdings of shares worth less than $100,000 in two bank-holding companies he doesn’t even regulate, playing it by the book.

And then there’s Stephen Friedman, who airily declares that he sees no conflict of interest in owning several million dollars worth of shares in a bank-holding company he regulates, and then investing a couple of million dollars more in the company to make a multi-million dollar profit.

The government has told Bank of America it needs $33.9 billion in capital to withstand any worsening of the economic downturn, according to an executive at the bank.

The government’s determination that Bank of America doesn’t need as much capital as it has already received from taxpayers is an indication that even some of the most troubled banks may not need more government money than has been allocated to them.

A close second for my favorite part of this article is this:

It could satisfy regulators’ demands simply by converting non-voting preferred shares it gave the government in return for the capital, into common stock.

But that would make the government one of the bank’s largest shareholders.

Sounds way too close to nationalization for Geithner/Summers/Obama‘s delicate crapitalistic sensibilities. And we’re now judging “progress” based on whether or not we have to double down on the idiotic bank bailout the banks got just a few months ago? I swear, we are ruled by fucking morons.

They’ve blown the politics, the policy, and when the next wave of foreclosures and the coming commercial real estate crash hit, they will have gone quite a long way towards blowing up the whole country.

“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” he said.

President Barack Obama (4/14/09):

The reason we have not taken this step has nothing to do with any ideological or political judgment we made about government involvement in banks. It’s certainly not because of any concern we have for the management and shareholders whose actions helped to cause this mess. Rather it’s because we believe that pre-emptive government takeovers are likely to end up costing taxpayers even more in the end and because it’s more likely to undermine than to create confidence.

First, you have to wonder if Geithner’s “we” (nullus?) excludes Obama and/or Obama’s “we” excludes Geithner. Because these two statements are 100% mutually exclusive if we aren’t being subjected to administration Venn diagram games. On the merits, private shareholders pretended not to know about all the shenanigans that produced their returns, and management used every trick in the book to show paper gains rather than actual value. This is the system that Geithner thinks we need to preserve?

Taking Obama at his word that ideology played no part and that saving taxpayer money was the primary concern — though absurd when factoring in the pedigree of his economic team — doesn’t yield any credibility either. The trillions of dollars in cash, liquidity, and guarantees that the government has pledged and disbursed haven’t solved the problem, and mainstream estimates of the economy’s trajectory don’t look promising for the survival of most of the big banks. If these banks are going to be nationalized, they should have been nationalized already, otherwise the injections are just payoffs to the same management and shareholders that ruined the system in the first place. But Obama isn’t being honest here, and it’s not even a very thinly veiled lie. He has taken advice only from free marketeers advising more free market solutions. Summers and Geithner have long records of market evangelism and the deregulation that allowed the banks to cause this mess.

That some are taking Obama’s comment as a positive development (he does listen to us!) is a perfect example of how much Obama is able to get away with just because he’s not Bush.

Sens. Richard Shelby (R-AL) and Jeff Sessions (R-AL) announced today that “they are blocking President Barack Obama’s nomination of Ashton Carter as Under Secretary of Defense for Acquisition, Technology, and Logistics.” The senators want assurances that Carter will not “change the criteria” on which the Pentagon considers a refueling tanker contract that could benefit defense contractors in their state.

Let’s see, Rod Blagojevich demanded a quid pro quo for nominating Obama’s replacement to the Senate. These honorable gentlemen from Alabama are demanding a quid pro quo for agreeing not to obstruct confirmation of an Obama nominee.

Whichever way I look at it, the difference between Shelby and Sessions’ conduct and Blagojevich’s seems to be one of degree rather than kind. The disgraced governor was looking for a personal, pecuniary quid pro quo. These disgraceful senators are looking for a political quid pro quo from which they expect to reap personal benefits.

(2)
If you close your eyes and picture this scenario, what immediately comes to mind is the Bush administration:
— A Democratic Congress passes legislation to impose restrictions on corporate conduct.
— The administration conspires with said corporations to wriggle out from under said restrictions.

Then you open your eyes, and you find that once again, while you weren’t exactly looking, Bushworld has seamlessly melded into Obama-time:

The Obama administration is engineering its new bailout initiatives in a way that it believes will allow firms benefiting from the programs to avoid restrictions imposed by Congress, including limits on lavish executive pay, according to government officials.

Administration officials have concluded that this approach is vital for persuading firms to participate in programs funded by the $700 billion financial rescue package.

Sidestepping the restrictions is trivial. You just take a leaf from Enron’s book (namely, the infamous SPV or special purpose vehicle).

The restrictions apply only if the government provides federal aid directly to financial companies. So:

… the government has set up special entities that act as middlemen, channeling the bailout funds to the firms and, via this two-step process, stripping away the requirement that the restrictions be imposed, according to officials.
[...]
This strategy has so far attracted little scrutiny on Capitol Hill, and even some senior congressional aides dealing with the financial crisis said they were unaware of the administration’s efforts.
[...]
Legal experts said the Treasury’s plan to bypass the restrictions may be unlawful.

“They are basically trying to launder the money to avoid complying with the plain language of the law,” said David Zaring, a former Justice Department attorney who defended the government from lawsuits involving related legal issues. “They are trying to create a loophole to ignore Congress, and I think the courts will think that it’s ridiculous.”

The federal watchdog agency overseeing the bailout is looking into the matter, trying to determine whether the Treasury’s actions are legal.

And you know why it’s okay to circumvent the will of Congress by Enron-like means that may be unlawful? Because Larry Summers and Tim Geithner have determined that:
a) Since they are the masters of the Masters of the Universe, Congress is less than the dirt beneath their feet.
b) Financial companies who are drowning have to be persuaded to let the government throw them a life preserver.

Saving the poor liddle financial companies is a noble end. And if Tweedledum and Tweedledee determine that they can be saved only by circumventing the will of Congress, well then, that’s that. The nobility of the end trumps any discussion of the acceptability of the means.

There’s oversight by Congress, and then there are games-administrations-play to evade oversight. That much Bush taught us all too well.

So, Obama’s lesson seems to be that there’s legislation by Congress, and then there are games-administrations-play to effectively nullify legislation.

(And we’re still only in the first trimester!)

(3)
The Bush administration went about committing war crimes with impunity, convinced that they had adequately airbrushed their crimes via sundry memos produced on demand by the Office of Legal Counsel.

Maybe the emerging story of the Obama administration will be the equally uncaring commission of widespread economic crimes? Maybe some not-yet-widely-reviled lawyer in some not-yet-a-household-name government office is already hard at work, producing copious questionable justifications for everything Summers and Geithner have done, and plan to do? To Congress, to us the taxpayers, and maybe even to the Constitution?

“The likelihood of failure here is too high to invest any more political or financial capital at the moment,” said a Democratic official close to the White House. “For all the negative aspects of structured bankruptcy [a likely outcome for GM], it doesn’t necessarily collapse the domestic auto industry for all of time. It will continue to exist in some form.”

The official added: “They have more confidence in the leadership on the banking side – that there are people in place who understand what went wrong and the steps necessary to deal with this disaster. They have no sense of confidence that the auto industry has the capacity or plans to structure a workout.”

Theoretically, an Obama supporter with some stones (a theoretical being) could argue that ‘more’ is a relative term, and that if administration officials have 0.00 confidence in Detroit and 0.0000001 confidence in Wall Street then this position is reasonable. But the problem is that small relative differences don’t offer much in the way of a hook on which to hang a plan. Once again, Obama is fucking up the politics and the policy, and he apparently has no one around him who can counterbalance the influence of the banks’ best buddies, Geithner and Summers. There is going to be a terrible price to pay for these actions.

The chairman and chief executive of General Motors, Rick Wagoner, is resigning, just hours before President Obama was expected to unveil his rescue plans for G.M. and the ailing American auto industry, a person close to the decision said Sunday.

Mr. Wagoner was asked to step down as part of G.M.’s restructuring agreement with the Obama administration, according to an administration official who spoke on condition of anonymity because a formal announcement has not been made yet*. Mr. Wagoner then agreed to resign.

G.M. and Chrysler are on the verge of exhausting the $17.4 billion in federal loans given to them since December. G.M., which received $13.4 billion, has asked for up to $16.6 billion more, and Chrysler, which got $4 billion, another $5 billion.

The president’s auto task force is expected to recommend more short-term assistance to the two Detroit companies, but with tight strings attached to the money and a new deadline to get concessions from union workers and creditors.

There was this odd period in December, after the TARP was passed and before those loans to G.M. and Chrysler were approved, where it seemed like every reporter and media outlet was determined to ignore the abject hypocrisy of the Bush administration shoveling money to Wall Street while making the automaker CEOs literally beg for a couple months of operating expenses. The starkest illustration came in the form of private jets: TARP recipient Citi was awaiting delivery on 3 Falcon 7Xs valued at $120 million, while media attention forced Rick Wagoner of GM, Alan Mulally of Ford, and Robert Nardelli of Chrysler to drive ~1000 miles round trip for their second Congressional appearance. Not far behind the private jet example comes the issue of compensation. While the Wall Street firms were ingesting $350 billion in TARP funds (and who knows how much more in AIG counterparty make-goods) they were lavishing their employees with bonuses. Even after “top executives” skipped their bonuses, Goldman gave out more in bonuses than they took in in TARP money. At the same time, the right managed to inject their absurd rhetoric about rank-and-file auto workers making $70/hour into the traditional media. Billions and billions for fake financial alchemists? Sure! An honest wage for current auto workers and long-promised pension and health benefits for retirees? Hell no!

At the time, I didn’t worry too much about this hypocrisy (other than my head exploding) because I chalked it up to the death rattle of the Bush administration trying to poison the well just a little bit more before they left office. Obama was theoretically a Democrat, and he wouldn’t allow all this to continue, or so I was assured by his wise and prescient supporters. Oh well:

Schieffer: Mr. President, you’re scheduled to announce on Monday what you plan to do with the auto industry as they’re asking for more federal money.

President Obama: Right.

Schieffer: You’ve told them they’re gonna have to cut back, present a different business plan. Our sources tell us that as far as the White House is concerned, they’re not there yet. Do they have to do more in order to get this money?

President Obama: Yes. They’re not quite there yet. There’s been some serious efforts to deal with a combination of long-standing problems in the auto industry and the current crisis, which has seen, you know, the market for new cars drop from 14 million to nine million. Everybody’s having problems, even Toyota and other very profitable companies.

And so what we’re trying to let them know is that we want to have a successful auto industry, U.S. auto industry. We think we can have a successful U.S. auto industry. But it’s got to be one that’s realistically designed to weather this storm and to emerge at the other end much more lean, mean, and competitive than it currently is.

And that’s gonna mean a set of sacrifices from all parties involved, management, labor, shareholders, creditors, suppliers, dealers. Everybody’s gonna have to come to the table and say it’s important for us to take serious restructuring steps now in order to preserve a brighter future down the road.

Schieffer: But they’re not there yet.

President Obama: They’re not there yet.

Ken Lewis at BofA, Vikram Pandit at Citi, and every other bank CEO remains in place, with government bailout money financing bonuses, and a brand new plan for the government to leverage and backstop investors who want to buy securities from their failed banks. Meanwhile, autoworkers have proposed new concessions on top of the concessions they accepted in 2007. Wagoner gets axed. Bondholders face haircuts. Shareholders face dilution. But, Obama says “they’re not there yet.” I wonder, then, on the scale of “there” to “not there”, where are the banks?

And on the scale of “there” to “not there”, where is your saviour, and bringer of change from all that was Bush, Obama?

*Well, it seems there is a twist.

The White House says neither General Motors nor Chrysler submitted acceptable plans to receive more bailout money, setting the stage for a crisis in Detroit and putting in motion what could be the final two months of two American auto giants.

President Barack Obama and his top advisers have determined that neither company is viable and that taxpayers will not spend untold billions more to keep the pair of automakers open forever. In a last-ditch effort, the administration gave each company a brief deadline to try one last time to convince Washington it is worth saving, said senior administration officials who spoke on the condition of anonymity to more bluntly discuss the decision.

Awesome. You know, I don’t recall Wall Street’s “acceptable plan” but I am familiar with “taxpayers [spending] untold billions to keep the bank’s doors open. I spent part of Friday watching CNBC interview the bank CEOs who were invited for high tea and a round of Obama apologizing for threatening their bonuses. Today, Wagoner gets the ax, and Obama plays chicken with 140,000 American jobs and the vast majority of the U.S. auto industry. Both sectors have screwed up about as badly as is imaginable, but it’s difficult to imagine that there is less overcapacity on Wall Street relative to Detroit.

I’ll wait for an explanation as to why this all makes sense. I’m sure Summers and Geithner fully explained both sides, and offered their expert, reasoned, and balanced advice. And I’m sure they are standing by to show off their deft political touch when even the most favorable measure of the unemployment rate passes 10% this summer.

For so many reasons and in so many ways: